America's Cup: Coutts and Dalton share their views on the Cup's future

Sun, 5 May 2013

The heads of two America's Cup teams squared off in Auckland on Friday May 3, 2013, at a fundraising dinner to support the 2016 Paralympic campaign of two America's Cup sailors, Rick Dodson and David Barnes.

Organised by Duco Events, the dinner was staged at Auckland's prestigious Langham Hotel and sponsored by ASB Bank, the evening, hosted by top international yachting commentator, Peter Montgomery, consisted of several speaking, interview and auction phases, between dinner courses over a period of four and a half hours.

The Grand Finale was a 'Rumble in the Jungle' as the two protagonists, Grant Dalton, head of Emirates Team NZ, and Russell Coutts, his counterpart in Oracle Team USA faced a question and answer session that lasted 45 minutes.

It was a unique opportunity for the pair who have different views on most things with the current America's Cup and the future of the event. Unlike other occasions when they have been able to put forward some, at time extreme view, without serious challenge. On this occasion neither allowed the other to get away with that approach. And if that was not enough a very sailing savvy audience, kept them up to the mark.

Then the floor was opened to questions from the guests. While Coutts may have come to the dinner expecting to play in front of a home crowd for Emirates Team New Zealand, that was clearly not the case.

While there was applause on occasions, it was for both sides depending on the point, or for the good of the America’s Cup itself.

Reading from a September 2010 America’s Cup release issued in Valencia, Montgomery started by citing the cost cutting that was projected, and asked Coutts if he has achieved what he had set out to do?

Clearly Coutts hadn’t, by his own admission earlier in the evening, but echoed the 2010 lines, saying that he expected that whoever wins the 34th America’ Cup will have to find a way to reduce the costs by 25%.

But then Coutts spun onto another tack referring to the spectacle of multihulls: 'I don’t think anyone realised how good the multihulls would look on television. We were all worried that if we went much smaller than 72ft, or down to the size of the Volvo Round the World boats, that a monohull wouldn’t really look like the America’s Cup on television.

(Couuts overlooked the fact most popular America’s Cup ever in terms of US TV ratings, sailed in Fremantle, was sailed in the 45ftt waterline 12 metre class, and the television was stunning – but that was a factor of the Fremantle conditions rather than the size of the boat)

'Larry’s big concept was that if you really want to change the dynamic of this sport, you’ve got to make it look work on television,' Coutts continued. ' You’ve got to get the ratings right, once you get that right then you then we can talk about all the other things. But if you can’t do that then this sport is not really going to go forward.

'That was Larry Ellison’s dream, and I think it is right.' he concluded.

The next question was aimed at Emirates Team New Zealand’s plans for the Cup should they win in September.

Dalton refused to discuss the future of the Cup, should ETNZ win, saying they had never really discussed it at all, at Emirates Team NZ, but it was in the 'nice problem to have' category at this stage.

He added the program must be built on certain pillars, or first principles, one of which is cost reduction. 'The market for a brand like ours is about $30million. I disagree with Russell that this will ever be a sport that is of the populous, except maybe in this country and Italy through Prada.

The questioner cut Dalton off, and flicked the spotlight onto Coutts on the same point.

'I don’t think it makes sense not to have a plan. If you win the America’s Cup and there is a hiatus while everyone sits around waiting to work it out.'

(Again forgetting that was exactly what happened in February 2010 when Oracle won, save with the expression that there would be cost reduction and independence of race management – of which Ellison had most certainly delivered on the latter point.)

'I think it matters more what the broadcasters think, than what the commercial partners think, because then it is not sustainable,' Coutts continued.

'One of the things from Valencia in 2007 was that over 40% of the audience used to turn the television off after 20 minutes of racing. With the America’s Cup you have the choice of sitting around like a frog being boiled and wait to be finally boiled to death, or you can make changes. Larry’s approach was to look at the facts and say that it wasn’t working and we have to make changes.

'You have to talk to the broadcasters and see what they want to do, but I would doubt that they would want to push it back to monohulls.

'Don’t forget that you can’t race monohulls close to shore, either.

Planning for the futureThe next question addressed the issue of if Emirates Team NZ won, whether the 35th America’s Cup actually be sailed in New Zealand. Daltons short response what that is why the team exists - to bring the Cup back to New Zealand.

And then he played a trick out of Coutts’ book, by addressing a point from his own laundry list of issues.

'Can I just bring up Russell’s point about having a plan? I agree – you should have a plan. But the difference between a dictatorship plan and a consensus plan, is that you ask the other teams what they think and you probably go with what they say.'

The remark was greeted with applause from some sections of the audience, and immediate aside comment from the rest.

A US accented 'questioner' then made what turned into an address to the two protagonists. Telling Coutts that he had been 'brainwashed by Larry', and that the Cup wasn’t about the ratings, not about the TV, it was about the sport. The comment about the sport emphasis received considerable audience applause.

Dalton was first to respond, citing a discussion he had with now long-time America’s cup sailor, Paul Cayard, .a few years ago about the future of the game.

'I think we have to have a sport that the sailors want to be in,' was Dalton’s response.

'You’ve got to have the guys on the field first. Russell is correct that now we can race in anything. The problem is that racing in 3kts of breeze just pisses Dean Barker off, because suddenly it gets a lot more random. In the World Series regattas, Oracle are sailing better than us, and have been sailing better than us. But there is a lot of random factor.

'Cayard’s point is that the sailors will go where they are getting paid,' Dalton continued. 'And he is right. But I have a fundamental problem with that, in that you have to put on sport that the sailors want to be in. Not with the tail wagging the dog, which is what I think is happening now. I agree with Russell, the sport is big here. It is big in Italy and it has pockets in other countries. And yes we would love it to be Formula 1, but it just ain;t that sport.

'Good on Larry. The game is propped up by all his money at the moment in that respect. It can’t be washing its face in terms of TV – and we’d love to know if it is.

'I think it is an internet based sport, because it is much more accessible. And for TVNZ who are the stalwarts, I think they have done a fantastic job, but I think its lifespan is almost over on TV and it is an internet based sport. I am completely the other way around and it should be produced for the internet. We disagree on that.'

America's Cup - for TV or the interweb?Montgomery posed the question to Coutts as to whether the America’s Cup was a niche television sport.

Coutts responded saying that Larry had never thought of the Americas Cup seriously competing with the NFL, noting that Ellison was involved in investing in tennis and other sports as well.

'We need to make the sport commercially viable'

'I you look at the numbers from 2007, it just didn’t work as a television product. 'It is starting to work as a TV product now. The TV companies are starting to invest in the internet, and the internet companies may invest in TV. You can’t really separate those two.'

(With those comments Coutts hadn't recalled the fact that the 2007 Americas Cup is claimed to have made a profit of more than EUR60 million, distributed amongst the teams, and attracted an accumulated audience estimated at 4.2 billion.)

Like on many occasions during the evening, Dalton had a fundamental difference, on this point, with Coutts’ philosophy.

'I don’t think the sponsors get into it for the ratings on TV,' he said.

'I have a fundamental thinking on my difference on sponsorship. Sponsors get involved for the dream and the passion, and in our case, the New Zealandness of it.

'Most CEO’s look at the idea, and the passion , and whether they believe the same things about bringing, in our case, the Cup back to New Zealand. Then they start to look at it to see if they can justify whether they should do it. Then make up their emotional mind beforehand.

'Nationality for me is important. The best Cup for me was in 1983 when Australia II beat Liberty, and it was very much Australia versus America. And that is also a big deal with budgets, because at the moment you are paying NFL type numbers for that sort of market – as you have to pitch in the open market.

'It is convenient, in Switzeland, for Bertarelli not to have a nationality rule. Why would he? There are no sailors.

'We fundamentally disagree, I think there should be a strong nationality rule.' The comment was met with some applause.

In a rare moment, Coutts briefly agreed with Dalton. 'I think there should be half a nationality rule. 'But once again you are going off with half the facts. If you go to the US for example and you create a nationality rule and you are paying sailors and workers to work for you, you would wind up with a legal challenge, and that is the last thing the America’s Cup needs.'

Why go with multihulls?Coutts was then questioned as to why he had elected to run with a multihull instead of a monohull, and whether they had a third boat in build.

'The reason we went to the multihull was logic. The fact is that you need more than one event every four years to create a marketing and racing platform for the team', replied Coutts..

'Most of the young sailors, Tom Slingsby, Nathan Outteridge, Ben Ainslie are coming straight from winning Olympic Gold medals, in those cases, and in New Zealand, Peter Burling is one of the sailors for the future. They have come straight out of the Olymoucs and into America’s cup sailing and done well. So while some may blame that on flukiness or randomness, other who are Gold medal winners get out there and win these races. As a sailor having raced on the world match racing circuit in so called fluky venues, it is amazing how the same people win.'

And on the third boat point, Coutts really struggled to count past two boats.

The session then turned onto how close the two rivals expected the racing to be?

'It is hard to tell,', Grant Dalton opened. ' The second Oracle Team USA boat has addressed their downwind issues with their cant and rake on their boards and foiling. They are going to be a lot better.

'We are treating it as an equal boat race.

'Their boat looks very nice aerodynamically, upwind. I think they are going to be very quick upwind, depending on the weather a little bit. History says that when you have a new class rule the boats aren’t close, first time around.

'But the boats are now coming together more, when they started a long way apart.

'Maneuverability will be really important because the course is tight. Maybe it will be up to the sailors, which of course is where you want it to be, so that in the end ultimately so that the best team wins.

Dalton concluded by saying that while the teams were all watching each other with radar trackers, to tell their rivals boat speed, and could estimate wind angles, they did not have boatspeed, and neither at this point knew how fast the other boat was sailing

Coutts’ perspective was that he didn’t see this America’s Cup as being any different from what has gone before .

'No single factor will win it,' the three times America’s Cup winner remarked. ' This is a competition between sailing, design, boat building. They are your three big factors. I think the team that has done the best job of that will ultimately win.

Again he picked Dalton up for an earlier comment that Coutts had interpreted as meaning that their latest boat was orientated around light airs.

'I am surprised how you can say that a boat is a light wind boat. Anyone who has been in San Francisco knows that it blows very hard there. We would not even think of doing a boat orientated around lighter conditions. I am interested that the opposition, one of the opposition, thinks we are a light wind boat.

Dalton interjected saying that he had said a September boat (one designed for conditions expected in san Francisco in September). And later in the evening further clarified his comment saying a boat designed for lighter conditions than those expected in July and August when the Challenger Selection Series, or Louis Vuitton Cup, will be run.

Then it was time for Coutts turn to correct an earlier statement, when he was questioned as to why he had said he did not expect to met Emirates Team NZ in the America’s Cup Match.

Saying he was misquoted Coutts said he said 'I wouldn’t rely on expecting to meeting Emirates Team NZ in the America’s Cup. There is a long way to go yet, and a lot of development to be done.

'For example, Artemis clearly had some concepts wrong But I think they had some right and I wouldn’t rule them out. The great thing about the America’s Cup is you don’t actually score points until you start racing. You can think you are doing well and beat you chest beforehand but really it only matters when the two boats line up in the Final, and the points really count.'

Last Waltz for Team NZ?The audience clearly had its own laundry list of prior comments that needed to be put to the two rivals.

One of these was the fact that Grant Dalton had been quoted as saying that if Emirates Team New Zealand did not win in the 34th America’s Cup, they would not compete again.

'Is this our last crack?' the questioner asked Dalton. ' 'It is, if it is north of $100million', was the quick reply. 'Certainly mine, I would imagine, Russell will make sure of that.

'Not necessarily, but it is not sustainable if you look at the way we are funded, and Sunday Star Times have done a bit of that (another baggage item referring to an 'investigation' done by a weekend newspaper on the Government agency sponsorship of Emirates Team New Zealand.)

'A third of our funding is public money, a third is sponsorship.' (The other third, it later transpired is private backing)

As along time player in raising substantial funding for his sailing campaigns, Dalton took a new path and talked about sponsorship in the sailing, rather than just the Americas cup context.

'An interesting thing about sponsorship, in my view, it is easier to raise sponsorship in a recession than in good times. The reason being that all sponsors rationalise.

'I use Omega as an example which have been with the team for a long, long time. Let’s say they are sponsoring ten sports and decide to cut back to five spots but they spend more proportionately on this sports even though their budgets are cut. If you happen to be one of those sports you are better off.

'I think we have done well in the sponsorship market but it is only $30-35 million. The rest is private help. We couldn’t have got there otherwise.'

Russell Coutts couldn’t let the opportunity go without making his comment on Team NZ’s future beyond an unsuccessful 34th America’s Cup.

'I don’t think it should be NZ’s last effort ever - even if it loses,' Coutts said.

'I think there should be a change of thinking , but it shouldn’t be the last effort.

'There is too much invested in the event in this country, and there are plenty of up and coming people, like Peter Burling (Olympic silver medalist in the 49er class and an AC45 skipper), who is a fantastic athlete, who knows how to win. There are plenty of New Zealand sailors coming through who will be able to compete on the world stage in the future.'

Dalton has been a long-time critic of the AC45’s and America’s Cup World Series.

Coutts was asked to respond. 'Clearly it is a concept that is beginning to work. We can do the Red Bull Youth America’s Cup using the AC45’s. '

'Earlier we talked about nationality,' he continued. 'One of the problems with that is when you go into a country like China or Korea, where they don’t really have a sailing base that can mount a team

'Red Bull Youth America’s Cup is a nationality based competition, no-one except the coaches gets paid. We had 64 teams coming into that event which will develop a talent base in some of these countries. What we need to do is build a pyramid of progression so that some of these developing nations who have good sailors can actually come in and compete at America’s Cup level.

'There is definitely a place for an AC45 type boat which is containerised. The biggest cost in an ACWS is the non-containerised items which make up 65% of the cost. So you need containerised boats (the AC45 can be dismantled and fitted into a 40ft container).

Dalton stepped back a little from his earlier views. 'Yes the AC45’s do have a future - whether it is with the America’s Cup or not is another thing. That depends on what you do if you have it.

Viability of AC World SeriesTurning to Coutts, Dalton asked a slightly pointed question: 'Am I right in saying that the budgets for the ACWS event have dropped by 50% since the start?' (A reference to the view of some that the early rounds of the ACWS were extravagant for the amount of revenue that was being generated from them.)

Coutts responded saying that he was not sure about the 50% cost reduction cited by Dalton, but added that the last ACWS events have been profitable.

Dalton would not let go on this point, and asked point blank what it would costs a city, like Naples, for an ACWS event hosting.

Coutts tacked away from that one immediately preferring to talk about the benefits rather than the costs. (A call that was greeted with incredulity by the audience.)

'Venice made an $18million profit. Newport was $40million', Coutts said.

'San Francisco hasn’t been disclosed yet but we know it was profitable.

'In terms of the running costs, you could do a lot of things in future with television. Rather than shipping 60 people you could transmit the picture remotely. So the costs could come down to $1 – 2 million dollars.'

Dalton picked up the running again. 'The answer to the question is 'yes' but most cities are on their knees. But they have to put on events, and Auckland is doing an amazing job at present. But the ACWS is not running at a price where it can wash its face financially Unless Larry wants to support it, it just can’t happen.'

Key points for the next three months

The question and answer session concluded with Peter Montgomery giving Coutts and Dalton one minute each to summaries the key points for the next three to four months.

Dalton starts: 'For us - are we fast enough? We don’t know.

'I would like to be able to say 'I think we are', but I actually don’t know.

'It may turn into a race between the guys on board, but it may turn into a speed drag race. That is historically, often what the America’s Cup is about.

'We have to keep developing.

'Russell is right when he says there are no points until the Cup. But we have to get to the Cup yet. We have to survive July and August, and until September when the wind gets lighter.

'Then hopefully we get to September and race Oracle. And the way we look at it, are looking very good. I hope we get that opportunity and can bring the Cup back.

Coutts believes the development will continue apace for the next three or four months, and that these will change the game again.

'The fascinating thing about this game is that it moves all the time.

'One, two or three Cups ago the key factors in winning may not be the key factors this time, and in fact probably won’t be. That is the fun part of this game. It is always evolving. It is always challenging. There are always new ideas to explore and interrogate.

'Personally, I like our chances. I think we have got a good team. A good sailing team; a good design team; and a good boatbuilding team.'

The Question and Answer session ended on a cordial note with both shaking hands to sustained applause from the appreciative and sailing-savvy audience.

Next week we will cover the opening comments by Coutts and Dalton, and also hear from the beneficiaries of the fundraising evening, Rick Dodson and david Barnes, on how it is like to go from America's Cup sailors to Paralympians in the space of two decades.